Under terms of the deal, Cerberus, which owns Albertsons supermarkets, will pay $40 a share for Safeway, valuing the merger at $9 billion. Albertsons operates about 1,000 stores, while Safeway has about 1,600 stores. The combined company will employ more than 250,000 workers, the Los Angeles Times notes.

The merger with Safeway will allow Albertsons to compete more effectively with supermarket giant Kroger (KR), which operates 2,640 stores. Safeway announced that it was looking for a buyer in February.